AI-exposed power stocks get crushed as fears about DeepSeek trigger stock market sell-off
AI-influenced power stocks were decimated by technology selling on Monday, as an AI advance by China’s DeepSeek raised questions about the level of AI spending and their dominance in the market.
Constellation Energy (CEG:The operator of the largest US nuclear power plant fell a record 19%, while power generator Vistra Corp.VST:) recorded a daily record decline of 29%. Electric equipment manufacturer and servicer GE Vernova (GUY:) decreased by 21%. Even nuclear power startup Oklo (Okay) containing 21%.
DeepSeek, a Chinese AI startup, released a new model of artificial intelligence on January 20, which is observed as competitive with OpenAI’s chatbots and other U.S. tech companies.It was also cheaper to make, requiring fewer AI chips than models from bigger players.
Big Tech is insatiable energy requirements sent power supplies for data centers growing in 2024 and this year, according to Goldman Sachs by 2030, the demand for electricity will increase by 160%.
Constellation last year announced the nuclear energy agreement with software giant Microsoft to revive its Three Mile Island, Pennsylvania-based unit.In December, social media giant Meta (AFTER:) is issued request for proposals from nuclear power developers to help meet the company’s AI needs.
Constellation, Vistra and GE Vernova all set new records just after President Donald Trump’s announcement last week. A new $500 billion project — With the support of SoftBank (SFTBY:), Oracle (ORCL:), and OpenAI.
Wall Street analysts played down the market’s reaction on Monday.
“I don’t think DeepSeek is doomsday for the AI ​​infrastructure,” Bernstein CEO and senior analyst Stacey Rasgon told Yahoo Finance on Monday.
“They are the models [DeepSeek] built are fantastic, they really are, and they’ve pulled a number of levers on efficiency, but what they’re doing is also not miraculous, or unknown to other leading AI researchers or AI labs that are out there,” he added. :
Analysts expect more clarity later this week when Microsoft (MSFT:Two of the biggest AI data center infrastructure spenders and Meta are expected to report earnings.
Their outlook is also likely to affect AI chip maker Nvidia (NVDA:) It is appreciated more than 40% Nvidia’s revenue comes from Microsoft, Meta, Alphabet (GOOG, GOOGLE:), and Amazon (AMZN:), according to Bloomberg data.
Ines Ferre is a senior business reporter at Yahoo Finance. Follow her at X @ines_ferre:.
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